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Wednesday, November 6, 2013

Obama About to Give Big Labor An Obamacare Tax Break

Barack Obama is about to take care of his favorite constituents again. He intends to exempt some union plans from one of the law’s substantial taxes. Insurance companies and self-insured employers that hire outside claims administrators are liable for a tax, which starts at $63 per insurance plan member next year and is projected to raise $25 billion over three years.

Buried in rules issued last week is the disclosure that the administration will propose exempting “certain self-insured, self-administered plans” from the law’s temporary reinsurance fee in 2015 and 2016.

That’s a description that applies to many Taft-Hartley union plans acting as their own insurance company and claims processor, said Edward Fensholt, a senior vice president at Lockton Cos., a large insurance broker.

Big labor has been critical of Obamacare lately, complaining about the provisions which encourage employers to reduce workers hours and demanding subsidies for their group insurance which does not qualify based on the law.

Eliminating the reinsurance fee was one of several resolutions adopted at the AFL-CIO’s September convention, along with giving union plans access to ACA tax credits for lower-income members.

In September the White House said the law disallowed health-law tax credits for union members on top of their company insurance. Now the administration seems to be moving toward part — but not all — of what labor wants on the reinsurance fee.

While it intends to waive the fee for 2015 and 2016, unions also wanted it scrapped for 2014, when it will be greatest. Taft-Hartley plans are collectively bargained and run jointly by unions and employers to allow workers to move from job to job without losing coverage.

(...)The fee “takes money from the pockets of each laborer covered by a health and welfare fund and gives it to for-profit insurance companies,” Terry O’Sullivan, president of the Laborers International Union of North America, wrote in a letter to President Barack Obama last summer.

Cancelling the fee takes money from the pockets of the average American and gives it to big labor, something Obama has done often since he was first inaugurated in 2009.